Socially Responsible Investing
Increasingly, people realize they can make a difference in their own communities and in the
world by following the principles of Socially Responsible Investing (SRI), all while earning
SRI is based on three complementary practices:
Collectively, these practices have had a significant impact both on corporate behavior and
on poverty both in the United States and abroad.
- Companies in an investment portfolio are screened according to various social
criteria, such as their environmental impact, labor practices, and corporate
- Companies in which investments are made are lobbied to improve their business
practices - a process known as shareholder activism.
- At least a portion of assets are invested in ways that promote community
development, e.g., economic opportunities and affordable housing in lower and
middle income communities.
SRI is growing rapidly, as evidence accumulates not only that competitive returns can be
earned in this manner but also that, as we enter the 21st century, new paradigms for
economic activity are emerging. Businesses that ignore such issues as climate change and
fair labor practices may be sacrificing their long-term competitiveness in a short-sighted
attempt to boost the next quarter's returns. As a result, an ever larger percentage of
assets are being managed using some or all of the principles of SRI. In the U.S. alone,
this figure is estimated to be $2.1 trillion, or one out of every 8 dollars invested.